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Every VC firm has their own methods to select a company of investment, but on a broader view VCs usually look for following in a company to invest -
1. Sales - As VCs invest in a business that is in operations for atleast couple of months (or years), first thing they look at is sales. Having a considerable volume of sales with increasing graph is important
2. Previous funding - They look at the amount of capital invested by founders and angel investors (as % ownership of each)
3. Business potential - As VCs invest a lot of money, they prefer to invest in the companies whose business model has the potential to become very big (e.g. they might invest in an internet company with a global reach rather than a standalone retail store. Though it is not a rule)
4. Exit Options - VCs invest their money as multiply it with a large number and make profits. They always look for exit startegy
5. Founders - VCs also look at the personality of the founders. At the end of the day, founders are going to run the business (until professionals come)
Please let me know if you need any clarification. I'm always happy to answer your questions. Kindly best this answer if it has helped you.
Oct 5th, 2015
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